Analyzing Retail REITs: Upgraded Outlook for Tanger, Downgraded Expectations for Kimco and ROIC

BofA Securities analyst Jeffrey Spector changed the rating for a few retail REITS following their Retail Executive Summit with 8 REITs.

The analyst upgraded Acadia Realty Trust AKR to Buy from Neutral at an increased price target of $20 (from $18).

The rating reflects the leading internal growth outlook, near-term 

growth opportunities, upside to FY24 guidance from recovering 

Street retail assets include lagging markets like Chicago and lower capital expenditure on Street leases.

The analyst estimates an FFO per share of $1.30 in 2024 and $1.35 in 2025. 

Spector also increased the rating on Tanger Inc. SKT to Neutral (from Underperform) and upped the price target to $31 from $24.

The bullish stance reflects the company’s strong platform and balance sheet, successful efforts to improve assets, and increased earnings visibility.

The analyst estimates the FFO per share to be $2.06 in 2024 and $2.14 in 2025.

Spector downgraded Kimco Realty Corporation KIM to Neutral from Buy and cut the price target to $20 (from $24).

The rating change reflects less accretion from the company’s acquisition of RPT Realty for around $2 billion.

Kimco closed the acquisition of RPT in January 2024.

The analyst estimates the FFO per share to be $1.56 in 2024 and $1.65 in 2025.

Also, the analyst lowered the rating on Retail Opportunity Investments Corp. ROIC to Underperform from Neutral and slashed the price target to $12 (from $14.5).

The lowered rating is due to higher risk for the company’s dilutive acquisitions (vs. better-positioned peers) and smaller opportunity sets for achieving growth.

The analyst estimates the FFO per share to be $1.04 in 2024 and $1.06 in 2025.

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